When an employer or converts from a traditional pension plan to a cash balance plan, the employer determines the accumulated value held in the old pension under each employee's name and may transfer all or only a portion of debt accumulated value into the employee's new account.

Question

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When converting from a traditional pension plan to a cash balance plan, the employer calculates the accumulated value in the old pension for each employee. They may then choose to transfer the full amount or only a portion of this value into the employee's new cash balance account. This process is part of the conversion strategy and is subject to regulations and agreements.

When an Employer or Converts from a Traditional Pension Plan